Should I use reflective or formative construct?

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Marsha Sabrina
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Joined: Sun Apr 17, 2022 11:41 am
Real name and title: Marsha Sabrina Lillah

Should I use reflective or formative construct?

Post by Marsha Sabrina »

Dear All,

I have an observed firm performance as dependent variable (i.e. performance measured by ROA, ROE, Tobin's Q, and market to book ratio). Then the independent variable are three type of ownership structure (foreign, managerial, and state ownership). The mediation variable is independent commisioner.
So i am confused how should i model this observed?. Should it be a formative construct or a reflective construct?. Thanks
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